Goldman Calls for $100/bbl Brent by Next Spring

Goldman Sachs expects Brent to hit $100/bbl by next Spring according to Daan Struyven, head of oil research in an interview with CNBC.

• He said that he thinks the latest bearish factors for oil will prove to be transitory referring to the dip in crude over the last week – (Goldman pins these on unguided fears around US gasoline demand, overdone fears on a rate driven recession and technical factors.)
• “We think that OPEC, thanks to its elevated pricing power and robust demand, will push Brent to $100/bbl by next Spring.” Struyven said.
• On the US SPR, Struyven said “The significant release of the [US] SPR was a major contributor to the sell-off in crude markets in the second half of last year and the first half of this year. However, moving forward we don’t think the SPR will be a major mover of crude prices.”
• “The main reason is because you are down almost 300 million bbls over the last two years, the bar we think to start releasing SPR again is pretty elevated.” Struyven added.
• Goldman forecasts believe that Russian production discipline will continue to persist and they will continue to co-operate with the Saudis, contributing to global low supply and a deficits throughout next year.